Traders work on the floor of the New York Stock Exchange (NYSE) on Monday, December 22, 2025 in New York, USA.
Michael Nagle | Bloomberg | Getty Images
U.S. 10-year Treasury yields rose on Tuesday, the penultimate day of the year, as traders digested the latest December Federal Reserve meeting minutes.
The 10-year Treasury yield rose less than 1 basis point to 4.124%. The two-year bond yield fell more than 1 basis point to 3.448%.
1 basis point equals 0.01%. Yield and price are inversely related.
Minutes from a highly divisive meeting the Fed held earlier this month suggest that another rate cut vote appears to be on the horizon. As a result, the federal funds target range has been lowered to 3.50% to 3.75%.
“Most participants determined that further downward adjustments to the target range for the federal funds rate would likely be appropriate if inflation declines over time as expected,” the document said.
A third interest rate cut this year has been controversial, with some policymakers arguing for further easing to prevent further weakness in the labor market, while others say policy is already sufficiently accommodative and risks accelerating inflation.
“Our basic assumption is that the committee will continue to be incentivized to maintain as much flexibility as possible until the FOMC decision on January 29th. We expect this stance to remain consistent throughout 2025 and apply into the new year,” said Ian Lingen, head of U.S. rates strategy in BMO Capital Markets’ fixed income strategy team.
